TMI Blog1977 (1) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 1st March, 1970 properzi rods were exempted from duty. This exemption was withdrawn by another notification dated 26th March, 1970. As a result of withdrawal of the exemption, properzi rods became leviable with ad valorem duty from 26th March, 1970 After this change, there was some uncertainity in the beginning as to the mode of payment of differential duty on the production of properzi rods out of duty paid ingots. There was some correspondence between the petitioner and the excise authorities on this subject and the petitioner was informed that it was liable to pay excise duty on ad valorem basis on the properzi rods but it could take advantage of the provisions of Rule 56A for getting credit of the duty already paid on the ingots. On 22nd April, 1970, the petitioner applied to the Assistant Collector, Central Excise, Jabalpur, for permission under Rule 56A to receive duty paid ingots and for being allowed a credit of the duty already paid on the ingots. On 6th May, 1970, the petitioner again wrote to the Assistant Collector requesting for permission to avail of the credit facility under Rule 56A from 26th March, 1970. The Assistant Collector by his letter dated 11th May, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 1970 and 30th May, 1974 without payment of duty by virtue of the exemption granted by the aforesaid notification. 4. In February 1974, the petitioner received a show cause notice dated 15th February, 1974, issued by the Collector alleging certain defaults of the petitioner under Rule 56-A for the period from 26th March, 1970 to 21st April, 1970 and requiring the petitioner to show cause why (i) penalty be not imposed under sub-rule (4) of Rule 56-A; (ii) the facility of working under the proforma credit procedure be not withdrawn; and (iii) the inadmissible proforma credit of Rs. 69,164.40 should not be disallowed. The petitioner denied the defaults or breaches alleged in the show cause notice and sent a reply to the notice on 16th April, 1974. The petitioner then filed Misc. Petition No. 1402 of 1975 under Article 226 of the Constitutional challenging the said notice. 5. The petitioner received another notice dated 9th July, 1974 issued by the Assistant Collector requiring the petitioner to show cause why the credit of duty taken on ingots under Rule 56-A during the period from 26th March, 1970 to 10th May, 1970 amounting to Rs. 14,44,459.40 be not recovered under Rule 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscation." 8. We have earlier stated that the notice dated 15th February, 1974 challenged in Misc. Petition No. 1402 of 1975 alleged certain defaults of the petitioner under Rule 56-A and required the petitioner to show cause why penalty be not imposed under sub-rule (4) of Rule 56-A; the facility of working under the proforma credit procedure be not withdrawn; and the inadmissible credit of Rs. 69,164.40 should not be disallowed. Learned Counsel for the petitioner during the course of his arguments has confined his attack to this notice only in so far as it required the petitioner to show cause why the credit of Rs 69,164.40 earlier allowed be not disallowed. The other notices challenged in Misc. Petitions Nos. 1233 and 1333 of 1975 also require the petitioner to show cause why the credit of duty earlier allowed under Rule 56-A be not withdrawn and the amount of the credit be not recovered under Rule 10-A. Apart from other points which are raised in these petitions, it is submitted by the learned Counsel for the petitioner that there was no provision in the Act or in the Rules at the relevant time for disallowance of credit of duty allowed under sub-rule (2) of Rule 56-A ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese notices was allowed under sub-rule (2) much beyond six months before 14th August, 1976 when the new sub-rule (5) was added. As regards the notice impugned in Misc. Petition No. 1402 of 1975, there are allegations of wilful mis-statement or suppression of facts on the part of the manufacturer in the notice. It is, however, not disputed before us that the credit sought to be disallowed by the impugned notice was allowed under sub-rule (2) on 1st September, 1970. Thus, the credit in this case was allowed beyond five years before 14th August, 1976 when sub-rule (5) was added in Rule 56-A. On admitted facts it is, therefore, clear that the period of limitation for issuance of notices for disallowance of credit under sub-rule (5) had already run out in all the cases on the date when the sub-rule was added. No notice, therefore, could have been issued under sub-rule (5) for disallowance of the credit and for recovery of equivalent amount in any of the cases. It is, therefore, impossible to accept the contention of the learned counsel for the respondents that the impugned notices can be supported under sub-rule (5) of Rule 56-A. 10. As regards the notices dated 10th October, 1974 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no interference should be made under Article 226 at the stage of notice. It is now settled law that if a notice issued by a tribunal or authority threatening to initiate proceedings prejudicial to a person is on admitted facts in excess of jurisdiction the tribunal or authority can be prohibited from further proceeding in the matter under Article 226 to save unnecessary harassment of the person concerned: [See Calcutta Discount Co. v. I.T. Officer (A.I.R. 1961 S.C. 372), East India Commrl. Co. v. Collector of Customs (A.I.R. 1962 S C. 1893)]. In N.B. Sanjana v. E.S. W. Mills (A.I.R. 1971 S.C. 2039), which is a case under the Central Excises and Salt Act, interference made by the Bombay High Court at the notice stage under Article 226 was upheld by the Supreme Court. We, therefore, do not accept the submission that no interference should be made at this stage under Article 226 in these petitions. 12. We have earlier stated that in Misc. Petition No. 1402 of 1975 the learned Counsel for the petitioner has confined his challenge to that part of the impugned notice which directs the petitioner to show cause why the credit of Rs. 69,164.40 earlier allowed under sub-rule (2) of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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